ETF/No Load Fund Tracker Newsletter For Friday, October 14, 2011

Ulli ETF Tracker, Uncategorized Contact

ETF/No Load Fund Tracker StatSheet

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THE LINK TO OUR CURRENT ETF/MUTUAL FUND STATSHEET IS:

https://theetfbully.com/2011/10/weekly-statsheet-for-the-etfno-load-fund-tracker-newsletter-updated-through-10132011/

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Market Commentary

Friday, October 14, 2011

Bullishness Bolsters Equity ETFs, But For How Long? Upper End of Trading Range Reached!

For a second straight week, markets moved to the upside even amidst Eurozone uncertainty and mixed economic indicators on a global scale. After a couple relatively flat days, market optimism skyrocketed in today’s session, with the S&P jumping up 1.74% while gaining 5.74% for the week. Also, the VIX dropped 8% to 28.24, showing a sharp pullback in volatility.

This might have you craving equities once again and brings up the question “where are we now?”

For weeks, I have been talking about the broad sideways pattern the markets are locked in to. The low end, on the S&P 500, is in the 1,100 to 1,120 area, while the upper end has put a lid on past advances in the 1,220 to 1,230 range. Last Tuesday, I posted the following chart with the red arrow showing the current position:

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Weekly StatSheet For The ETF/No Load Fund Tracker Newsletter – Updated Through 10/13/2011

Ulli ETF StatSheet Contact

ETF/Mutual Fund Data updated through Thursday, October 13, 2011

If you are not familiar with some of the terminology used, please see the Glossary of Terms.

 

1. DOMESTIC EQUITY MUTUAL FUNDS/ETFs: SELL — since 8/9/2011

The domestic TTI broke through its long-term trend line generating a Sell for this area effective 8/9/2011. Over the recent past, we’ve seen the TTI hovering slightly below and above this dividing line between bullish and bearish territory. I will not issue a new Buy signal until this index has clearly pierced the trend line to the upside and has remained there.

As of today, our Trend Tracking Index (TTI—green line in above chart) has broken back above its long term trend line (red) by +1.01%.

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Major Market ETFs in a State of Flux as Gains Decelerate

Ulli Market Review Contact

[Chart courtesy of MarketWatch.com]

Following a recent wave of optimism, markets began to slightly retreat today after yesterday’s relatively flat performance. The S&P fell 0.3% although the NASDAQ rose 0.60% due to positive tech news, further bolstered by Google’s greater than expected third quarter earnings, resulting in a 6% boost in after hours trading that might carry on into tomorrow.

Meanwhile, Oil and gold dropped 0.28% and 0.35%, respectively, inching back after both were almost down 1.5%. Also, the VIX nearly breached the 20s range, dipping to 30.70, providing some ease after a period of nervously high volatility.

With regards to earnings, J.P. Morgan had disappointing earnings with a 33% drop in profit as a result of lower investment banking and trading revenue. This is a negative sign given that J.P. Morgan was one of the relatively unscathed banks from the financial crisis that has performed well during the downturn. Let’s just say that already unattractive financial services sector ETFs just got uglier.

However, are there some other sector ETFs that show promise?

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Another Day in the Green – Is This Cause for Changing Your ETF Strategy?

Ulli Market Review Contact

[Chart courtesy of MarketWatch.com]

Although not a huge day, markets remained in the green, with the S&P 500 rising 0.98% and the dollar continuing its downward slide against the Euro to $1.38/Euro. Again, volatility decreased significantly, with the VIX falling 4.87%. This recent market run-up beckons the question of whether one should dive in and seek to capitalize on this short-term rally.

With Slovakia coming closer to a compromise concerning the EFSF expansion, there is temporary optimism that there will be an adequate financial backstop to help solve Europe’s debt issues.

However, I am looking long-term to see whether a sustainable model can be implemented that won’t rely on continual borrowing with mounting financial obligations. One strategist pointed out correctly that “if the Europeans deliver what they normally deliver, which is well below expectations, then risk assets will sell off and the euro will come under pressure once again.”

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7 ETF Model Portfolios You Can Use – Updated through 10/11/2011

Ulli Model ETF Portfolios Contact

The markets staged a recovery since last week’s report and surged from the low point of the trading range back to the upper part, but not close enough to demonstrate a break out to the upside. I displayed the S&P 500 graph in Tuesday’s market commentary.

With all portfolios, we continue to be in a holding pattern waiting for new opportunities to develop. The changes from last week have only been minor, since we no longer are invested in any equity ETFs.

Take a look at the latest numbers:

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Quieter Day for ETFs, But That May Change Very Soon; Trading Range Still Intact

Ulli Market Review Contact

It was a somewhat uneventful day as markets ended relatively flat from the S&P to commodities and exchange rates. Is this a sign of a sea change following a week of up days? It just might be. Leaving Europe aside, the start of the earnings season kicked off rather disappointingly, which is likely to be reflected in tomorrow’s trading session. For example, Alcoa fell well below estimates while Goldman Sachs is forecast to have its worst quarter since later 2008.

After several days of subsiding volatility, today remained very stable as the S&P remained within an approximate 10 point range. Investors might be regaining their risk appetite as seen by an infusion of $1.23 billion into SPY yesterday a result of a pullback in the VIX and recently flat performance in bond ETFs. However, I firmly believe that there are too many negative signals warranting justification to get back into equity ETFs. There is simply very little evidence at the moment suggesting a move into bull territory.

In relation to Europe, the overall picture still isn’t looking so good. Greece is set to receive an $11 billion loan next month as part of its $110 billion rescue package which doesn’t bode well for investor confidence in Greece’s ability to escape default.

Adding another twist to the European debt crisis fiasco, just when the situation appeared to be under control after France and Germany’s joint statement to recapitalize banks, political turmoil has surfaced once more.

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